During his days as Nizam, he was reputed to be the richest man in the world, having a fortune estimated at US$2 billion in the early 1940s ($33.7 billion today)[3] or 2 per cent of the US economy then. At that time the treasury of the newly independent Union government of India reported annual revenue of US$1 billion only. He was portrayed on the cover of TIME magazine on 22 February 1937, described as the world's richest man.[4] The Nizam is widely believed to have remained as the richest man in South Asia until his death in 1967, though his fortunes fell to US$1 billion by then and became a subject of multiple legal disputes between bitterly fighting rival descendants.

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The Nizam's vast inheritance was accumulated as mining royalties rather than land revenue. Hyderabad State in British India was the only supplier of diamonds for the global market in the 19th century.

Mir Osman Ali Khan Siddiqi Bahadur acceded as Nizam of Hyderabad upon the death of his father in 1911. The state of Hyderabad was the largest of the princely states in pre-independence India. With an area of 86,000 square miles (223,000 km²), it was roughly the size of the present-day United Kingdom. Its ruler was the highest-ranking prince in India, was one of only five princes entitled to a 21-gun salute, held the unique title of "Nizam", and was created "His Exalted Highness" and "Faithful Ally of the British Crown" after World War One due to his financial contribution to the British Empire's war effort. (For example, No. 110 Squadron RAF's original complement of DH.9A aircraft were Osman Ali's gift. Each aircraft bore an inscription to that effect, and the unit became known as the Hyderabad Squadron.[5])

Mir Osman Ali Khan Siddqi Bahadur was the absolute ruler of this principality. In some accounts, he is held to have been a benevolent ruler who patronised education, science and development. During his 37-year rule electricity was introduced, railways, roads and airways were developed, the Nizamsagar lake in Hyderabad state was excavated and some irrigation projects on the Tungabhadra river were undertaken.

In 1941 Mir Osman Ali Khan Siddqi Bahadur started his own bank, the Hyderabad State Bank (now State Bank of Hyderabad) as the state's central bank, which managed the Osmania sikka, the currency of the Hyderabad state. It was the only state which had its own currency, the Hyderabadi rupee, which was different from the rest of India. Hyderabad was the only state in British India where the ruler was allowed to issue currency notes. A 100 rupee note was introduced in 1918.

In 1947 the Nizam made a gift of diamond jewels, including a tiara and necklace, to Princess Elizabeth on the occasion of her marriage. The brooches and necklace from this gift are still worn by the Queen and is known as Nizam of Hyderabad necklace.[6]

Nearly all the major public buildings in Hyderabad city, such as the Osmania General Hospital, Andhra Pradesh High Court, Asafiya Library now known as State Central Library, Town Hall now known as Assembly Hall, Jubilee Hall, Hyderabad Museum, now known as State Museum, Nizamia Observatory and many other monuments were built during his reign. Up to 11% of the Nizam's budget was spent on education. Osmania University was founded, and schools, colleges and a "Department for Translation" were set up. Primary education was made compulsory and provided free for the poor. The Nizam (as well as his predecessors) have been criticised for largely ignoring the native languages in favour of Urdu.

After Indian independence in 1947, the country was partitioned on religious lines and Pakistan was established as a Muslim nation. The princely states were left free to make whatever arrangement they wished with either India or Pakistan. The Nizam ruled over more than 16 million people and 82,698 square miles (214,190 km2) of territory when the British withdrew from the sub-continent in 1947. The Nizam refused to join either India or Pakistan, preferring to form a separate kingdom within the British Commonwealth of nations.

The proposal for independence was rejected by the British government, but the Nizam continued to explore this possibility. Towards this end, he kept up open negotiations with the Government of India regarding the modalities of a future relationship while opening covert negotiations with Pakistan in a similar vein. He also concurrently encouraged the activities of the Razakars. The Nizam cited the Razakars as evidence that the people of the state were opposed to any agreement with India.[citation needed]

Ultimately the new Indian government decided to invade and capture Hyderabad in 1948, in an operation with codename Operation Polo. Under the supervision of Major General Choudhry, one division of the Indian army and a tank brigade invaded Hyderabad. The battle was quick and the Nizam's troops and the mercenary soldiers called Razakars gave up easily. However it is estimated that 27,000 to 40,000 civilians were massacred during and following the invasion.[7]

On 14 April 1920 Mir Osman Ali Khan Siddiqi Bahadur married Azmathunnisa Begum (Dulhan Pasha Begum) (1889–1955),[8] daughter of Nawab Jahangir Jung, at Eden Bagh now known as Eden Garden at king kothi, Hyderabad at the age 21. She was the first of his seven wives and 42 concubines, and the mother of his two eldest sons Azam Jah and Moazzam Jah. His second wife was Iqbal Begum, daughter of Nawab Nazir Jung Bahadur (Mirza Nazir Beg)

Mir Osman Ali Khan Bahadur died on Friday, 24 February 1967. It was the end of a princely era. His funeral procession was one of the largest in Indian history.[citation needed] He had willed that he be buried in the Judi Mosque that faced King Kothi Palace.

The Nizam was the honorary Colonel of the 20 Deccan Horse. In 1918, Nawab Mir Osman Ali Khan Siddqi Bahadur was elevated by King George V from His Highness to His Exalted Highness. In a letter dated 24 January 1918, the title Faithful Ally of the British Government was conferred on him.[9]

During the reign of Mir Osman Ali Khan Siddqi, Bahadur introduced some educational reforms. He was the founder of Osmania university in Hyderabad.

In 1936 Osmania University established post-graduate courses and research facilities in all the sciences: Physics, Biology, Chemistry, Medicine, Engineering, Metallurgy as well as Law, Education and Teacher training courses. By 1948 its degrees were accepted by Indian universities and British universities.[citation needed]